FG to revive Ajaokuta in three years – Minister

The Federal Government says it is determined to revive the Ajaokuta Steel Plant within the next three years.

Minister of Steel Development, Prince Abubakar Audu who made the disclosure said the government would be creating a 10-year roadmap for the revival of the steel and metals industries, nonferrous metals industries in Nigeria.

Audu said a part of that would involve giving out the Ajaokuta Steel complex to people who have the core competence to be able to get the job done.

He said Ajaokuta has about 44 different production units or production plants within the 24,000 hectares in terms of the land area that occupies different aspects of Ajaokuta and the government could make it so the different aspects can be handled by different people with different core competencies.

The Minister said this yesterday in Abuja at a press conference organised to intimate the media of the efforts to reposition the steel sector.

His words, “Local production, and consumption of steel in Nigeria is actually in excess of 5 million metric tonnes. However, the local production is a very small fraction of the total amount that is consumed in Nigeria. Most of the steel that is produced locally is actually made from scrap metals as opposed to going through the production using all the natural resources including, iron ore, dolomite, cooking coal, limestone you know all the relevant raw materials.

“So, the mandate that the President has given us is to do some homework to try and revive the industry. It is a difficult task but there are certain things that we plan to do over the several years to achieve this objective. Number one is, we want to create a 10-year roadmap for the revival of the steel and metals industries, non-ferrous metals industry in Nigeria.

“In addition to that, we will also put together a three-year roadmap for the revival of the Ajaokuta Steel Complex, a part of what that would involve would be to concession the Ajaokuta Steel complex to people that have the core competence to be able to get the job done. Are they producing steel?

“Ajaokuta has about 44 different production units or production plants within the 24,000 hectares in terms of the land area that occupies perhaps different aspects of Ajaokuta you know, maybe you know, different aspects can be handled by different people with different core competencies.

“Well, part of what Mr. President has said in terms of the revival of Ajaokuta on the three-year roadmap is that we should use a collegiate approach for the revival and I think I’ve said this several times in the past. Two things that we’re looking to do on that collegiate approach to achieve some immediate success in the short, the revival of the light steel mill for the production of iron rods.

“Number two, I’ve had several engagements with the Minister of State for Defence, who we are looking to partner with in terms of Ajaokuta Steel complex together with Defence Industries Corporation of Nigeria (DICON), in terms of military hardware and capabilities can be done. Part of the plan is to revive the engineering workshop to get it going to help us produce military hardware. It’s a lot of work but it’s something that Mr. President has given us his full support and the Federal government is determined to do those things.”

He added, “About the three-year plan for Ajaokuta and whether we should assume that it would start working, I think the short answer is yes. The three-year plan is to enable us to start production of some form of steel production in the next three years, so we should be able to get the light steel mill working, the engineering workshop working, we should be able to get some of the lines plants working and operating at near full capacity or full capacity.

“Part of what we would also do within those three years is to concession it to a concessionaire that has the required skill set to be able to actually have liquid steel production coming out of blast points. Ideally, in a perfect scenario, that’s what we would like. And I suspect that the concession agreement to be worthwhile for the concessionaire would have to be a minimum of let’s say, 10 or 30 years, agreement where they would be able to recoup their capital.

“And like I mentioned previously, based on the advice I’ve been provided with and based on some of the data that I’ve seen and the technical analyses that have been done, we would need between two to five billion US dollars to be able to revive this entire Ajaokuta Steel complex but certain things can be done in piecemeal before we resolve the entire issue with the plant. What we plan to do is to restart the Light Steel Mill (LSM) section, which will cost us about 35 billion naira to be able to produce 50,000 metric tonnes of iron rods, the raw materials that will be used for the production of the iron rods would be imported. So the billets would be imported at this first stage. And then the billets will be rolled into iron rods.

“For now no decision has been made on the aspects of concessionaire for the steel, we need to do our homework. Maybe in a few months for now we need to go and visit the potential concessionaire, and see there are still plants. Do they have the capacity to be able to produce, should we go with the Russians that built the plant originally or should we concession it to another country?”